What can be done about crypto scam ads?

Crypto scam ads promising wild riches have appeared on Facebook for years, yet there seems to be little progress in stopping them once and for all.

With every passing week, the number of audacious crypto scam ads online — and the unsuspecting victims losing eye-watering sums of money — continues to grow.

And to make matters worse, they’re often found on the social networks we trust the most, Facebook and X among them. 

Both tech giants are losing in the battle to protect their users from fraudsters attempting to entice them with too-good-to-be-true crypto investments.

Many of these bogus ads mimic official news sites and contain false quotes from celebrities in an attempt to generate a sheen of credibility.

And while they are rapidly taken down after being reported, it’s like a game of Whac-A-Mole, with dozens more subsequently popping up in their place.

But how big of a problem is this, and what can social networks do to eradicate scam ads once and for all? 

Lawsuits galore

High-profile individuals are fed up with their names and pictures being used in scam ads — prompting some to take legal action against the sites they appear on.

One of the first to head to the courts was Martin Lewis, a British journalist who is known as “Money Saving Expert” for his personal finance tips.

Given how he has long been a trusted voice on money matters, it’s easy to see how someone could be drawn into a bogus ad touting a once-in-a-lifetime opportunity.

Back in April 2018, he sued Facebook for defamation with a goal of pressuring the company into stepping up its efforts in preventing these ads from appearing.

By January 2019, Lewis had reached a settlement that included a $3.8 million donation to a new, independent project tasked with clamping down on scams.

This was certainly a step in the right direction. But more than five years on, Facebook users around the world are still being bombarded with these dangerous pages.

In a sign that history is repeating itself, an Australian billionaire has now been given the green light to sue Meta, amid claims Facebook has also profited from these adverts.

Andrew Forrest has alleged that thousands of people ended up losing millions of dollars after over 1,000 ads were plastered on the social network last year.

A common defense used by U.S. internet companies is Section 230 of the Communications Decency Act, which states it cannot be liable for content released by third parties. But Meta’s efforts to dismiss the case on this basis were rejected by a judge.

How is this happening?

BBC News recently wrote a deep dive into these scam ads, noting that its branding had often been used by criminals.

It explained that scammers are able to dupe Facebook’s detection systems by launching ads that appear to be going to a legitimate source, then quickly redirecting users.

The company says it’s now taking action to stop fraudsters using this technique.

Scam ads have also become much more prolific on X since Elon Musk’s takeover — and at times, has even rendered the site borderline unusable. 

But this particular social network has a distinct problem of its own: malicious actors managing to take over the accounts of people with millions of followers.

Just last week, 50 Cent revealed that his X profile and website had been taken over by hackers to promote a crypto pump-and-dump scam — with the rapper stressing he had nothing to do with the project.

“Whoever did this made $3,000,000 in 30 minutes,” he claimed on Instagram.

Put together, it doesn’t seem like there’s been much success in making crypto scam ads a thing of the past.

That’s a big problem for the crypto industry in particular as it attempts to win round the public and shake off its image of being a “Wild West.” 

So… what can be done about all of this? 

Well, regulators might need to step up more.

In the U.K, one policy that’s being considered could see social networks face a fine of 10% of their global annual revenue if they fail to protect users. That could make them sit up and take notice.

And while artificial intelligence is widely being used to create these bogus ads, AI tools could also play a valuable role in tracking them down before they gain traction.

Meta’s previously said that scam ads are increasingly sophisticated, and it has ensured that fake ads can be easily reported by any of its users. Meanwhile, X says its teams “work around the clock to safeguard the platform.” 

Unfortunately though, this is likely to be a problem that gets worse before it gets better.